Policy Recommendations for Crypto and Digital Asset Markets

Final Report

THE BOARD OF THE INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS

16 NOVEMBER 2023

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EXECUTIVE SUMMARY

The 18 IOSCO policy recommendations for the regulation of crypto and digital assets (Recommendations) included in this Final Report are designed to support greater consistency with respect to regulatory frameworks and oversight in IOSCO member jurisdictions, to address concerns related to market integrity and investor protection arising from crypto-asset activities. The Recommendations have been developed under the stewardship of the IOSCO Board’s Fintech Task Force (FTF) in accordance with IOSCO’s Crypto-Asset Roadmap published in June 2022.

The Recommendations are principles-based and outcomes-focused and are aimed at the activities performed by crypto-asset service providers (CASPs). They apply IOSCO’s widely accepted global standards for securities markets regulation to address key issues and risks identified in crypto-asset markets. The Recommendations are activities-based and follow a ‘lifecycle’ approach in addressing the key risks identified in this report. They cover the range of activities in crypto-asset markets that involve CASPs from offering, admission to trading, ongoing trading, settlement, market surveillance and custody as well as marketing and distribution (covering advised and non-advised sales) to retail investors. IOSCO separately consulted on proposed policy recommendations for “decentralized finance” or “DeFi” on 7 September 2023, which will be finalized by the end of 2023. At that time, IOSCO will also publish an umbrella note explaining in more detail the interoperability between the two sets of recommendations.

One of IOSCO’s goals is to promote greater consistency with respect to how IOSCO members approach the regulation and oversight of crypto-asset activities, given the cross-border nature of the markets, the risks of regulatory arbitrage and the significant risk of harm to which retail investors continue to be exposed. IOSCO is also seeking to encourage optimal consistency in the way crypto asset markets and securities markets are regulated within individual IOSCO jurisdictions, in accordance with the principle of “same activities, same risks, same regulation/regulatory outcomes”.

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